Southwest Georgia Financial Corporation Reports Second Quarter 2013 Results

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| Source: Southwest Georgia Financial Corporation

MOULTRIE, Ga., July 23, 2013 (GLOBE NEWSWIRE) -- Southwest Georgia Financial Corporation (the "Corporation") (NYSE MKT:SGB), a full-service community bank holding company, today reported its results of operations for the second quarter ended June 30, 2013.

Second Quarter and Six-Month Income Highlights

  • Net income was $574 thousand in the 2013 second quarter, or $0.23 per diluted share, compared with $305 thousand, or $0.12 per diluted share in the second quarter of 2012. The increase reflects higher net interest income and reduced pension costs.
  • For the six months ended June 30, 2013, net income was $1.1 million, or $0.45 per diluted share, a 30.1% increase from $876 thousand, or $0.34 per diluted share, for the same period in the prior year.
  • Net interest income grew $300 thousand to $3.2 million compared with the second quarter last year due primarily to increased interest and fee income on loans and a decrease in interest expense on deposits. 
  • Noninterest income decreased $472 thousand to $1.1 million for the second quarter of 2013, as a result of lower gains on the sale of securities and decreased income from the Corporation's commercial mortgage banking subsidiary. 

Balance Sheet Trends and Asset Quality

  • Total assets at June 30, 2013 were $351.4 million, an increase of 11.4%, or $35.9 million, from June 30, 2012.
  • Total loans increased $25.0 million, or 12.9%, to $219.4 million, compared with the same period last year. The growth in loans was driven by loan originations in the Valdosta and Moultrie markets.
  • Total deposits grew $37.1 million, or 14.3%, to $296.4 million at June 30, 2013, from the second quarter of 2012. Noninterest-bearing deposits, which funded the growth in loans, increased more than 37% year-over-year to $74.4 million.
  • Non-performing asset ratio was 0.57% at June 30, 2013, a 112 basis point improvement when compared with the second quarter 2012.

Capital Management

  • The Company has a total risk based capital ratio of 14.73%, measurably above the federal "well capitalized" standard.
  • Return on equity increased to 7.47% compared with 4.16% in the second quarter of 2012.
  • Tangible book value per share at June 30, 2013, was $11.77, up from $11.16 at the end of the second quarter of 2012.

DeWitt Drew, President and CEO, commented, "We are posting strong growth in assets and net income, despite a significant reduction in mortgage banking revenue. Our strategic decision to enter the Valdosta market is paying off as we continue to grow our low cost core deposit base to accompany the strong loan growth the Valdosta team has generated over the past three years."

Dividends

In June 2013, the Corporation paid a second quarter cash dividend of $0.04 per common share. Southwest Georgia Financial Corporation or its predecessor, Southwest Georgia Bank, has paid cash dividends for 85 consecutive years.

About Southwest Georgia Financial Corporation

Southwest Georgia Financial Corporation is a state-chartered bank holding company with approximately $351 million in assets headquartered in Moultrie, Georgia. Its primary subsidiary, Southwest Georgia Bank, offers comprehensive financial services to consumer, business, and governmental customers. The current banking facilities include the main office located in Colquitt County, and branch offices located in Baker County, Thomas County, Worth County, and Lowndes County. In addition to conventional banking services, the bank provides investment planning and management, trust management, mortgage banking, and commercial and individual insurance products. Insurance products and advice are provided by Southwest Georgia Insurance Services which is located in Colquitt County. Mortgage banking for primarily commercial properties is provided by Empire Financial Services, Inc., a mortgage banking services firm.

More information on Southwest Georgia Financial Corp. and Southwest Georgia Bank can be found at its website: www.sgfc.com.

SAFE HARBOR STATEMENT

This news release contains forward-looking statements, as defined by federal securities laws, including statements about the Company's financial outlook. These statements are based on current expectations and are provided to assist in the understanding of future financial performance. Such performance involves risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. For a discussion of some risks and other factors that could cause the Company's actual results to differ materially from such statements, please refer to the Company's filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q under the sections entitled "Forward-Looking Statements" and "Risk Factors". The Company undertakes no obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law.

Financial tables follow.

SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CONDITION
(Dollars in thousands except per share data)
       
  (Unaudited) (Audited) (Unaudited)
  June 30, December 31, June 30,
  2013 2012 2012
ASSETS      
Cash and due from banks $7,237 $8,646 $6,643
Interest-bearing deposits in banks 6,308 27,935 19,366
Certificates of deposit in other banks 4,165 3,920 980
Investment securities available for sale 31,769 21,672 14,243
Investment securities held to maturity 62,095 59,863 57,778
Federal Home Loan Bank stock, at cost 1,406 1,448 1,594
Loans, less unearned income and discount 219,385 204,137 194,339
Allowance for loan losses (3,049) (2,845) (2,910)
Net loans 216,336 201,292 191,429
Premises and equipment 10,176 10,149 10,629
Foreclosed assets, net 1,069 1,690 2,009
Intangible assets 219 327 435
Bank owned life insurance 4,890 4,767 4,678
Other assets 5,700 5,472 5,697
Total assets $351,370 $347,181 $315,481
LIABILITIES AND SHAREHOLDERS' EQUITY      
Deposits:      
NOW accounts $20,947 $28,881 $30,135
Money market 87,320 77,133 55,981
Savings 29,180 25,988 26,003
Certificates of deposit $100,000 and over 32,378 36,591 35,152
Other time accounts 52,202 55,098 57,763
Total interest-bearing deposits 222,027 223,691 205,034
Noninterest-bearing deposits 74,368 68,071 54,226
Total deposits 296,395 291,762 259,260
       
Other borrowings 12,000 2,000 2,000
Long-term debt 10,000 20,000 22,000
Accounts payable and accrued liabilities 2,772 3,544 3,353
Total liabilities 321,167 317,306 286,613
Shareholders' equity:      
Common stock - par value $1; 5,000,000 shares authorized; 4,293,835 shares issued (*) 4,294 4,294 4,294
Additional paid-in capital 31,701 31,701 31,701
Retained earnings 21,600 20,664 19,805
Accumulated other comprehensive income (1,278) (670) (818)
Total 56,317 55,989 54,982
Treasury stock - at cost (**) (26,114) (26,114) (26,114)
Total shareholders' equity 30,203 29,875 28,868
Total liabilities and shareholders' equity $351,370 $347,181 $315,481
       
* Common stock - shares outstanding 2,547,837 2,547,837 2,547,837
** Treasury stock - shares  1,745,998 1,745,998 1,745,998
 
SOUTHWEST GEORGIA FINANCIAL CORPORATION
CONSOLIDATED INCOME STATEMENT (unaudited*)
(Dollars in thousands except per share data)
         
  For the Three Months For the Six Months
  Ended June 30, Ended June 30,
Interest income:  2013* 2012*  2013* 2012*
Interest and fees on loans $3,034 $2,781 $5,953 $5,482
Interest and dividend on securities available for sale 170 192 332 424
Interest on securities held to maturity 365 375 731 734
Dividends on Federal Home Loan Bank stock 8 11 16 17
Interest on deposits in banks 14 12 37 30
Interest on certificates of deposit in other banks 11 3 21 7
Total interest income 3,602 3,374 7,090 6,694
         
Interest expense:        
Interest on deposits 216 277 460 568
Interest on other borrowings 80 11 94 22
Interest on long-term debt 109 189 283 379
Total interest expense 405 477 837 969
Net interest income 3,197 2,897 6,253 5,725
Provision for loan losses 105 105 210 210
Net interest income after provision for losses on loans 3,092 2,792 6,043 5,515
         
Noninterest income:        
Service charges on deposit accounts 287 300 586 599
Income from trust services 53 51 104 101
Income from retail brokerage services 91 106 167 201
Income from insurance services 312 328 671 703
Income from mortgage banking services 237 450 498 1,018
Provision for foreclosed property losses 0 (75) 0 (150)
Net gain (loss) on the sale or disposition of assets (3) (41) (57) (96)
Net gain on the sale of securities 0 338 0 338
Other income 172 164 386 376
Total noninterest income  1,149 1,621 2,355 3,090
         
Noninterest expense:        
Salary and employee benefits 2,074 2,680 4,177 4,701
Occupancy expense 253 246 506 480
Equipment expense 229 222 461 445
Data processing expense 272 285 548 563
Amortization of intangible assets 54 56 108 112
Other operating expense 746 615 1,377 1,274
Total noninterest expense 3,628 4,104 7,177 7,575
         
Income before income tax expense 613 309 1,221 1,030
Provision for income taxes 39 4 81 154
Net income  $574 $305 $1,140 $876
Net income per share, basic $0.23 $0.12 $0.45 $0.34
Net income per share, diluted $0.23 $0.12 $0.45 $0.34
Dividends paid per share $0.04 $0.04 $0.08 $0.08
Basic weighted average shares outstanding 2,547,837 2,547,837 2,547,837 2,547,837
Diluted weighted average shares outstanding 2,547,837 2,547,837 2,547,837 2,547,865
 
SOUTHWEST GEORGIA FINANCIAL CORPORATION
Financial Highlights
(Dollars in thousands except per share data)
             
At June 30   2013     2012  
             
Assets   $351,370     $315,481  
Loans, less unearned income & discount   $219,385     $194,339  
Deposits   $296,395     $259,260  
Shareholders' equity   $30,203     $28,868  
             
  Three Months Ended June 30, Six Months Ended June 30,
  2013   2012 2013   2012
Performance Data & Ratios            
Net income $574   $305 $1,140   $876
Earnings per share, basic $0.23   $0.12 $0.45   $0.34
Earnings per share, diluted $0.23   $0.12 $0.45   $0.34
Dividends paid per share $0.04   $0.04 $0.08   $0.08
Return on assets 0.64%   0.38% 0.63%   0.55%
Return on equity 7.47%   4.16% 7.43%   6.01%
Net interest margin (tax equivalent) 4.10%   4.24% 4.03%   4.17%
Dividend payout ratio 17.76%   33.43% 17.88%   23.27%
Efficiency ratio 80.12%   87.89% 80.03%   83.11%
             
Asset Quality Data & Ratios            
Total nonperforming loans $749   $3,202 $749   $3,202
Total nonperforming assets $1,993   $5,342 $1,993   $5,342
Net loan charge offs $0   $439 $6   $400
Reserve for loan losses to total loans 1.39%   1.50% 1.39%   1.50%
Nonperforming loans/total loans 0.34%   1.65% 0.34%   1.65%
Nonperforming assets/total assets 0.57%   1.69% 0.57%   1.69%
Net charge offs / average loans 0.00%   0.93% 0.01%   0.43%
             
Capital Ratios            
Average common equity to average total assets 8.54%   9.18% 8.44%   9.08%
Tier 1 capital ratio 13.44%   14.81% 13.44%   14.81%
Tier 1 leverage ratio 8.69%   9.16% 8.69%   9.16%
Total risk based capital ratio 14.73%   16.06% 14.73%   16.06%
Book value per share $11.85   $11.33 $11.85   $11.33
Tangible book value per share $11.77   $11.16 $11.77   $11.16
           
Quarterly 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
Averages 2013 2013 2012 2012 2012
           
Assets $359,767 $362,225 $341,418 $319,266 $319,525
Loans, less unearned income & discount $212,274 $203,106 $203,871 $199,145 $190,142
Deposits $303,995 $306,934 $285,965 $263,747 $262,095
Equity $30,723 $30,186 $29,624 $29,194 $29,343
Return on assets 0.64% 0.62% 0.75% 0.53% 0.38%
Return on equity 7.47% 7.50% 8.68% 5.76% 4.16%
Net income  $574 $566 $643 $421 $305
Net income per share, basic $0.23 $0.22 $0.25 $0.17 $0.12
Net income per share, diluted $0.23 $0.22 $0.25 $0.17 $0.12
Dividends paid per share $0.04 $0.04 $0.04 $0.04 $0.04
INVESTOR AND MEDIA CONTACT:
George R. Kirkland
Senior Vice President and Treasurer
Phone: (229) 873-3830